What the hell is a private enterprise?

Chapter 549 Gambling
Drawing a bond pie at Zhao Hande's house was more difficult than expected.

Bonds involve Lao Zhao's professional work, which he understands fairly well, and he also knows about the domestic demand for foreign exchange.

Many industries in China receive export subsidies, such as export tax rebates. In fact, in an era when domestic products lacked competitiveness, the government hoped to expand exports through subsidies, even if it resulted in losses.

Even if you exchange goods worth 1000 RMB (120 USD) for 100 USD in foreign exchange, you still make a profit; the value of that cannot be measured by simple exchange rate conversion.

Issuing dollar bonds with already limited foreign exchange reserves as collateral seems extremely risky.

Especially these days, with foreign exchange reserves tight and many people watching, it's easy to get caught out and something might go wrong...

Although he ultimately failed, Tang Wen was not discouraged. When it was time for dinner, he suddenly said something surprising:
"Old Zhao, a task concerning the rise and fall of the empire has fallen on your shoulders!"

"Pfft... Sit down first!"

Old Zhao wiped the sweat from his brow before asking:
"What empire? You can't just say that."

“I’m talking about a real empire.”

"That empire?"

"Which other empire could it be?"

After going around in circles, Old Zhao finally understood, and then asked absentmindedly:
"What do I care about the rise and fall of an empire? I'm just a lowly office clerk, what could it possibly have to do with me?"

"It has nothing to do with you, a lowly clerk, but it does have something to do with the Strategic Deception Bureau!"

"What?"

"Any interest in squeezing some money out of Old Mi?"

Old Zhao paused for a moment, going through all the recent events in his mind, and really had no idea what kind of amazing idea Tang Wen had come up with this time.

"What's with all this knocking? We're all just honest people."

Tang Wen: "Let me tell you a story first:
China boasts the world's third-largest shale oil reserves. In order to solve the problem of oil scarcity, China has focused on researching shale oil technology and finally succeeded. It was discovered that shale oil deposits under high pressure in the deep sea have extremely high yields and stable properties. At the same time, thanks to the characteristics of shale oil, it is easy to produce light crude oil.

So they secretly facilitated the establishment of Gaijin Company, conducted trials in the Nansha Islands and achieved great success, while treating the oil extraction technology as a treasure, classifying it as top secret and even forbidding its disclosure—how about that?

"..."

After listening, Old Zhao was stunned for a long time before he came to his senses. Combining what Old Mi had said, he thought for a moment and asked:
"Is this the story you want Old Mi to know?"

Tang Wen did not answer, but continued speaking:
"The Empire had more shale oil reserves, and was overjoyed upon learning of this. It was willing to pay any price to obtain shale oil technology, and ultimately paid a huge price to allow Geigin Oil to establish a base around the United States, with impressive production."

American oil companies are betting everything on shale oil and gas, determined to break through shale oil extraction technology.

Zhao Hande grasped the key point:

Is shale oil technology the wrong path?

Tang Wen: "It is a mistake to think that oil prices are low. Currently, and for many years to come, the cost of shale oil extraction will be much higher than that of refined oil."

At the same time, Geiger's technical approach is almost impossible to imitate.

"So the shale oil technology that the Empire spent so much effort to develop will never be profitable due to severe losses, ultimately dragging the huge investment into the abyss, causing a large number of companies to go bankrupt, and severely damaging the Federation, right?"

Zhao Hande slowly recounted the entire plan, then raised two questions: "First, how do we deal with their insistence on the technology? Second, how do we ensure that the oil price remains below their extraction costs?"

To answer the first question, Tang Wen directly cited the theory of "super speed as the enemy's weakness." As for the second question...

"Lowering oil prices is simple: just increase production. As long as Gekkin Oil continues to increase production, oil prices will continue to fall."

Zhao Hande was stunned, then revealed a deep sense of doubt.

How much oil does the Nansha Islands produce that it has the power to influence oil prices?

Currently, only OPEC can do this. The big player now produces nearly 2700 million barrels per day, accounting for almost 40% of the global daily production of 6900 million barrels!

This is a full eighty times the daily oil production of the Spratly Islands (33 barrels), which is why they have the ability to control the world.

It would take Gaijin Petroleum nearly three months to produce as much as OPEC in a single day, making it hard for Zhao Hande to believe Tang Wen's nonsense.

Even at the most frenzied pace, aiming for half of OPEC's share, it's still far beyond what Geijin can achieve at his current level.

Zhao Hande's analysis was reasonable and well-founded, but Tang Wen just laughed:
"How about we sign a performance-based agreement? It's a two-year deal... By December 31, 1999, Geijin Oil Company's daily production will be no less than 10 million barrels. Whatever the difference, we'll give you Geijin Oil shares."

Conversely, if this is achieved, then for the next three years, the company must purchase equipment and technology products from Gaijin that amount to no less than 20% of Gaijin Petroleum Company's annual output value in the previous year.

"Oh?"

Zhao Hande raised an eyebrow, never expecting that Tang Wen could come up with such a bizarre agreement.

This means that Gaijin Oil's production will increase more than 30 times within two years. Could it be that there is a super oil field in Nansha?
A daily production of 1000 million barrels is 137 million tons, which is 5 million tons per year!
Last year, the country's total oil consumption was just over 2 million tons, which was only half of the annual production!
Such large oil fields do exist, but they are all in the hands of big players. If there were such fields in the Spratly Islands, there would probably be records of "the Spratly Islands being rich in flammable oil" since ancient times. Surely they would have been discovered by now.

Tang Wen's attitude clearly showed that he was confident, which Zhao Hande found hard to believe, but he did have some faith in him.

However, he's not really interested in the betting agreement anymore; he'd much rather rush to the Ministry of Petroleum, grab all the experts by the collar, and ask them a dirty question:
They haven't discovered the oil field in Nansha that could potentially produce 1000 million barrels a day. Have they spent all the funding they've received over the years on eating braised pork offal and roasted meat?
If we had known earlier that there was a super oil field in the Spratly Islands that could support two large island nations, we would have used all the resources of the country to build a powerful navy to extract the oil and let the world know what it means for oil to breed rabbits!

However, this might be too shocking, and Zhao Hande couldn't possibly reply on the spot. He was absent-minded throughout the meal and soon said goodbye, disappearing without a trace.

……

Tang Wen boarded the plane with satisfaction, ready to plan his Christmas express journey.

He played a little word game when he said it earlier:
The subject of the bet is the production output of Gaijin Oil Company, not the oil production in the Spratly Islands.

A daily production of 1000 million barrels means 270 square kilometers of islands. Reclaiming land in the Spratly Islands would take forever, even with additional funding, it would still take more than ten years.

Tang Wen is an honest and conscientious farming player. If his own land is not good, he will automatically switch to someone else's land.

There are countless large islands in the world. For example, the Falkland Islands have an area of ​​12200 square kilometers, and if fully developed, they would produce 22 billion tons of oil annually, which is more than six times the world's current production of 34 billion tons.

If all of it were dumped, I'm afraid 99% of the oil companies in the world's major oil-producing regions would go bankrupt and be doomed.

If the Falkland Islands are too far away, then the South Pacific is entirely composed of island groups of varying sizes.

He doesn't keep Wang Odebiao Luffy Tiger around so he can enjoy life; it's just that the time hasn't come yet for him to use him.

(End of this chapter)